Minor bulks

Minor Bulks - Major Role in the Dry Bulk Market

We have discussed in previous articles the details around the three major bulk commodities namely iron ore, coal and grains which cover almost the 2/3 of the world dry bulk trade. Several other minor dry bulk commodities cover the balance 1/3 and in many cases, they highly influence the performance of the total dry bulk market. As shown in table 1, the growth of the minor bulk cargoes keeps a different trend than the growth of the major dry bulk cargoes. For example, in 2009 despite the fact that the major bulk cargoes faced an annual growth of 4%, the negative growth of -12% of the minor bulk trade resulted in a negative growth of -4% for the total dry bulk trade during the year. On the other hand, in 2015 major bulk trade was negative (-1%) however the total dry bulk growth was almost neutral (0% growth) since there was a 1% growth in the trade of the minor dry bulk cargoes.

Table 1: Growth of the dry bulk trade from 2008 to 20016

Growth of the dry bulk trade
⚹ — Estimate

The main minor dry bulk commodities are the following:

  • — Steel products
  • — Forest products
  • — Agricultural products in bulk
  • — Fertilisers
  • — Cement
  • — Petroleum Coke
  • — Bauxite & Alumina
  • — Scrap
  • — Other minerals

As we see in the OpenSea.pro, the minor dry bulk commodities are mainly traded in smaller parcels and they are usually carried in mini-bulkers (in the case of short sea shipping) or handysize and supramax bulkers (for longer distances). Table 2 summarizes the trading volume of the minor bulk commodities during 2015 and shows that the minor bulk cargoes accounted for about 38% of the total dry bulk trade.

Trading volume of the minor bulk commodities

Steel is the cargo with the largest trading volume among the minor bulk cargoes (21% of the total). Steel products consist of materials such as bars, beams and rods as well as plate, coils and pipes. Steel products are exported mainly from the major industrialised countries for importing to other industrialised nations and to developing countries. Major steel products are coming out of Black Sea, South Korea and China heading mainly to Europe, USA, Egypt, South East Asia and India.

Forest products hold the second position with about 18% of the total minor bulk cargoes. This category includes any wood-derived product and can be divided into either raw materials or processed goods. Raw materials include the logs (roundwood), sawn timber, wood pellets, pulp and woodchips. Logs require specialized vessels (loggers) which are fit with stanchions and other handling materials which are required in order to load and discharge logs. Russia is a major exporter of roundwoods exporting almost the 16% of the total, followed by New Zealand, USA, Canada and Malaysia. The main importing countries are: China (which imports almost 40% of the world roundwood, holding the leading position), Germany, Sweden, Austria, India and Finland. Sawn timber is mainly exported out of Canada, Russia, Sweden, Germany and Finland to China, USA, Japan and UK which are the major importers. USA is the main exporter of wood pellets, followed by Russia, Sweden and Germany, while it is mainly imported into UK (imports almost 1/3 of the global imports), Denmark, Italy and South Korea. The pulp is mainly exported from Brazil (which holds about 20% of the global exports), Canada, USA and Chile while it is mainly imported into China, USA, Germany, Italy and South Korea. Nothing is wasted and the sawdust and all other general remains from sawmills, which are called “woodchips”, are also used for various wood products (e.g. paper, linerboard etc) and a major trade exists in this commodity from the West Coast of USA to Japan. On the other hand, processed materials are ranging from plywood through to newsprint. Especially from newsprint, since this is a valuable cargo and vulnerable to mishandling damage, its trade is usually conducted by specialized vessels which have been employed in long-term contracts. Furthermore, since the top exporting countries are Canada and Finland, these vessels should be ice strengthened.

The agricultural products category includes various cargoes however the most important of them is sugar. Sugar is carried in either in its raw bulk form of cane sugar or beet sugar from the production areas to the refining place or refined sugar, usually in bagged form, from a refinery to a consumption area. Brazil is the major exporter of bulk sugar, followed by Thailand, Australia, India and Guatemala. On the other hand, major importers include the United Kingdom, France and USA. Tapioca, a tropical plant, is another known agricultural bulk cargo. Thailand is by far the largest exporter of this cargo and loading usually takes place from the port of Bangkok or in the case of larger vessels (e.g. Capesize bulker) in Kohsichang port. Tapioca is usually imported into European ports or China. Other agricultural products carried in bulk might be the soy meal, oilseeds and rice which are loaded mainly ex South East Asia (Thailand, Indonesia, Malaysia) to Europe, USA, China and West Africa. Though, the rice cargo which is discharged in West Africa is mainly in bagged form due to the lack of infrastructures. It is worth to note at this point that vessels loading agricultural products ex Indonesia or Malaysia may need to load in more than one port their full cargo and therefore the voyage lasts for a longer period.

Fertilisers are the 4th largest -in terms of trading activity- minor dry bulk cargo and their use is very important for the development of the grain and agricultural industry. To understand the importance of fertilisers it is worth to note that India has been transformed from an importer of grains to a producing country within 25-30 years due to the use of fertilisers. The three main chemicals required for plant growth are nitrogen, phosphate and potash. All of them occur naturally but nitrogen is also produced as a by-process of the oil and chemical industries. Nitrates are also in demand due to its other constituents, such as iodine. Sulphur is mainly exported from United Arab Emirates, Russia, Qatar, Canada, and USA while the largest importers are China (about 16% of global imports), DRC, South Africa and Indonesia. Phosphate is found all around the African coastal nations from Togo (Kpeme port) in West Africa, Senegal (Dakar) and Morocco (Casablanca, Jorf Lasfar, Safi) and Tunisia (Sfax and Gabes). Other exporters of phosphate are Jordan (Aqaba port), Egypt (El Hamrawein) and USG (Tampa port). Russia is also an exporter via the port of Murmansk and overland via Finland (port of Kokkola). Potash can be shipped naturally or as processed potassium chloride. The major exporter is Canada followed by Russia, Germany, Jordan and Israel. USA, Brazil and India are the major importers of potash.

Bauxite is another main mineral which is carried in bulk and it is considered as the most famous raw material used to produce alumina used in the aluminium metals production. It is exported in large quantities from West Africa (Guinea), Brazil, Dominican Republic and Australia into USA, Canada, North Europe and China.

Cement is a raw material which is used in the construction industry and it is usually carried in the form of grey or white powder and clinker. Bulk cement is the main exporting type is accounted for almost 60% of the total while clinker represents about 25% of the total cement trade. The remaining 15% is bagged cement. The major exporting countries are China, Thailand, UAE, Turkey and Germany. USA, Algeria, Bangladesh and France are some of the main importers however the global imports are distributed in various countries around the world. About 90% of the total bulk cement is carried in specialized self-discharging cement carriers while bulk carriers load a small proportion of the total bulk cement trade, along with clinker as well as cement in bags. Due to the fact that the bulk cargo is dirty, dusty and with a high risk in case it comes in contact with water or moisture, only few shipowners accept to load bulk cement/clinker in their bulk carriers and in these cases a protective clause is usually incorporated in the charter party so as to protect Owner’s interests.

Scrap metals form another important dry bulk seaborne commodity. Scrap is steel/metal/iron which is used for recycling purposes and it is obtained either from the disposal of unused/unwanted metals or from the excess metals which produced during the fabrication. The largest exporter is USA, followed by North European countries (i.e. Germany, UK) and Japan. Turkey imports almost 20% of the global scrap imports holding the leading position and followed by South Korea and India in the second and third position respectively. Scrap cargoes are loaded in various bulkers of any size from coasters up to supramax. In most cases, the vessels should be geared with their cranes in good working order while the shipowners are trying to incorporate specific protective clauses in their charterparty in order to ensure the soft loading of the cargo into the holds which is required in order to avoid damages on the tanktop.

Petroleum Coke (Petcoke) may be considered as part of the coal market, however, it is a by-product of the oil refining and it is mainly consumed in the cement industry. USA is the major exporter with a global share of almost 25%, while Venezuela, South Korea and China are also exporting nations. India, Europe and Japan are the major importers. Petcoke cargoes are not very popular with Owners since some of their grades are granular and rather oily, while others are fine and cause a dust problem. Therefore, it is considered as a very dirty cargo and it is difficult for the cargo holds to be cleaned after its discharge. Therefore, in most cases, the vessel is not able to load a grain cargo or similar clean cargo after she has discharged a petcoke. For this reason, in the case of a time charter fixture, it is common for shipowners to ask for a protective clause to be incorporated which also refers to a higher hold cleaning cost. On the other hand, in the case of voyage employment, this increased cost should be taken into consideration when making the TCE calculations.

Needless to say, that OpenSea users are involved in all above-mentioned trades and we see such open cargoes on a daily basis. Some of them are offered on the “best offer” basis while others are placed along with Charterer’s freight ideas. This constitutes another interesting feature for our users who can view the freight ideas and understand not only the current market levels in the area but also the future trends in various geographical regions and commodity segments.

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